05-C Lake Crook Study - Laserfiche WebLink

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~i!~ of Paris Stud~ of Lake Crook March, 3.5 OPTION 4 - DO NOTHING OPTION 3.5.1 Description of Option. This option takes very little explanation but every feasibility study must contain the "do nothing" option. The obvious lowest 'first cost' option available to the city is to take no action now and maintain the present course. Believe it or not, there were several surveys received that conveyed this exact sentiment.., leave the property the way it is now. 3.5.2 Discussion of the Option. Certain advantages are clear. The city would expend no more for maintenance that it does now. The lack of any development would protect the water supply Wildlife habitat, if anything, would be enhanced The lack of development will reduce the need for police protection except around existing park facilities. Low risk of failure However, the perceived lack of cost is deceptive. The loss of $1.8 to $ 3.0 million in revenue from the sale of the land has to be considered. On the flip side, however, the argument can be made that the land is likely to be worth more in the future as land north and west of Paris develops and appreciates. The value of twenty or more years of taxes is likewise important. Under Option 3, the estimated ad valorem tax revenues for just the City of Paris would be nearly $1.0 million. The present value, that is, the amount of money we would need to sock away now to equate to $1.0 million each year for 20 years at 5 per cent interest compounded, is over $12.5 million. The present value of$166,000 in estimated sales taxes to just Paris from Option 3 is over $2.0 million dollars on the same basis. Present value is one clear way of expressing the value of future tax revenues. Summing up then, the cumulative cost of doing nothing, expressed in present value terms for the next 20 years, could be as high as: $1.8 million from sale of land $12.5 million from ad valorem taxes $ 2.0 million from sales taxes $ 2.6 million in water/sewer/revenues Add to this the buying power and economic impact of 3,000 new Parisians and you are beginning to talk about real money! In fairness, you must deduct from this gaudy sum the cost increases to the city for city services since water, sewer, streets, drainage, parks, police and fire protection, and support services must be provided for these 3,000 new citizens. Based on the 2000-2001 budget, the expenditure per citizen in Paris for these and other city services is about $1,100 per person annually. Page 36 of 45